Customer won't pay invoice

[Paul Ballard]

Hi all, first post

I'm self-employed and I have a customer who won't pay some invoices.

There has never been a problem with the service provided or incorrect costs on the invoice. This customer provided all the purchase orders, I supplied the service direct to them and never dealt with any third parties.

They have terms in their purchase order saying they have ordered for someone else and they won't be liable (apologies I don't have the exact wording to hand). The customer is an estate/lettings agent and I have said the outstanding invoices are all with end-users they no longer trade with and the debt is nothing to do with them.

Is this a tactic that bigger companies use to fob off smaller businesses? It's about £400 so I'm trying to work out if its worth pursuing legally?

Thanks Paul

 

[fisicx]

If the invoice was made out to the estate agent then they are liable to pay.

Just use this service and get your money back:

MCOL - Money Claim Online - Welcome

www.moneyclaim.gov.uk

 

[Ozzy]

As said above, still pursue the invoice using the money claim process above.

They have terms in their purchase order saying they have ordered for someone else and they won't be liable (apologies I don't have the exact wording to hand).

A note for future terms, I would recommend not accepting purchase orders with that clause on them. I don't know how legally enforceable it is, but still I would recommend not accepting them.

 

[Bobbo]

The exact wording would have been helpful here - it sounds like you have accepted a purchase order which explicitly stated the letting agent was not liable to pay it.

The reality of any work you do for a lettings agent is that your actual customer is the owner of the property not the letting agent (thus the word agent). Is the actual underlying customer named on the purchase order?
As a matter of professionalism you'd think they shouldn't be procuring works on behalf of clients without having the funds to make payment for those works in place.

 

[Newchodge]

Hi all, first post

I'm self-employed and I have a customer who won't pay some invoices.

There has never been a problem with the service provided or incorrect costs on the invoice. This customer provided all the purchase orders, I supplied the service direct to them and never dealt with any third parties.

They have terms in their purchase order saying they have ordered for someone else and they won't be liable (apologies I don't have the exact wording to hand). The customer is an estate/lettings agent and I have said the outstanding invoices are all with end-users they no longer trade with and the debt is nothing to do with them.

Is this a tactic that bigger companies use to fob off smaller businesses? It's about £400 so I'm trying to work out if its worth pursuing legally?

Thanks Paul

Does the wording give the name and address of the 'liable person/organisation'?

Have you previously been paid by the4 agent for work ordered under a purchase order with this clause?

 

[MikeJ]

Ooh, this is a good idea. In future I'll place all orders and say someone else is liable for the bill. That sounds perfectly reasonable in my mind.

 

[UK Contractor Accountant]

Someone owes the debt if you haven't been paid - LA or the Landlord?

All comes down to who you invoiced - if you invoiced the LA and they didn't contest the invoice as being made out to the wrong person then they are liable to pay and its then up to them to get the money back from the Landlord.

If the invoice is made out to the Landlord but just sent to the LA for payment then your claim is against the Landlord.

 

[Paul Kelly ICHYB]

What do your terms of sale say about this?

 

[Chris Ashdown]

Just to clarify, was the estate company acting on the behalf of the owner,like landlords who own a building place the agent to be responsible to collect rent, and handle complaints, find new tenants etc

 

[Paul Ballard]

Hi all, first post

I'm self-employed and I have a customer who won't pay some invoices.

There has never been a problem with the service provided or incorrect costs on the invoice. This customer provided all the purchase orders, I supplied the service direct to them and never dealt with any third parties.

They have terms in their purchase order saying they have ordered for someone else and they won't be liable (apologies I don't have the exact wording to hand). The customer is an estate/lettings agent and I have said the outstanding invoices are all with end-users they no longer trade with and the debt is nothing to do with them.

Is this a tactic that bigger companies use to fob off smaller businesses? It's about £400 so I'm trying to work out if its worth pursuing legally?

Thanks Paul

This is what is added to base of a purchase order

Disclaimer: xxxx do not accept responsibility for any non-payment of invoices from their Landlords. Any payment dispute will be between the Contractor and the Landlord and not xxxx

 

[Paul Ballard]

Just to clarify, was the estate company acting on the behalf of the owner,like landlords who own a building place the agent to be responsible to collect rent, and handle complaints, find new tenants etc

Not necessarily. for a lettings agent they could work 2 ways

1 they are a tenant find service; they carry out all the front end services (contract, inventory, marketing, references, keys, deposit)

2 as above, plus they collect rent and manage the property during the tenancy so the Landlord is hands off.

The agent is working for the Landlord, they usually have a pot of money for each property. Having a tenant find service is usually where issues arise as the pot is smaller.

 

[Paul Ballard]

Does the wording give the name and address of the 'liable person/organisation'?

Have you previously been paid by the4 agent for work ordered under a purchase order with this clause?

98% of invoices have been paid no issues, its a couple have slipped through the net. All purchase orders are from the agent to me, no Landlord/third party details are included. My service is supplied directly to the agent.

 

[Paul Ballard]

Someone owes the debt if you haven't been paid - LA or the Landlord?

All comes down to who you invoiced - if you invoiced the LA and they didn't contest the invoice as being made out to the wrong person then they are liable to pay and its then up to them to get the money back from the Landlord.

If the invoice is made out to the Landlord but just sent to the LA for payment then your claim is against the Landlord.

All purchase orders are from the agent to me, no Landlord/third party details are included. My service is supplied directly to the agent. I invoiced the agent. They didn't complain about the service

The issue is these Landlords are no longer a customer of the agent, or that's the excuse being used.

 

[fisicx]

Just use MCOL. Don’t try to negotiate as they clearly have no intention of paying.

I’d also contest their disclaimer. You should be raising invoices to the Landlord.

 

[Newchodge]

All purchase orders are from the agent to me, no Landlord/third party details are included. My service is supplied directly to the agent. I invoiced the agent. They didn't complain about the service

The issue is these Landlords are no longer a customer of the agent, or that's the excuse being used.

Your contract is with the agent. I don't believe their clause would be valid if it oncluded the full details of the 'Landlord'. Without such details there is no way a court will accept it. Send a letter before action and sue them.

The fact the agent is no longer an agent for the landlord does not matter. They contracted with you, they have to pay you.

Apart from the letter before action, I would not communicate with them.

 

[Newchodge]

Just use MCOL. Don’t try to negotiate as they clearly have no intention of paying.

I’d also contest their disclaimer. You should be raising invoices to the Landlord.

They can't raise invoices to the Landlord, they have no way of knowing who they are!

 

[fisicx]

They can't raise invoices to the Landlord, they have no way of knowing who they are!

Yes, but they can ask. If the info isn’t forthcoming the PO disclaimer is meaningless.

 

[Newchodge]

Yes, but they can ask. If the info isn’t forthcoming the PO disclaimer is meaningless.

I would suggest that, in the absence of usable information on the purchase order, the disclaimer is meaningless anyway.

Imagine I place a purchase order with a company supplying computer hardware, stating that I am not responsible for payment, any payment dispute will be with fisicx, moderator of UKBF. It just cannot be legally binding.

I do agree, however, that no-one should ever accept a purchase order with sych a disclaimer.

 

[Mark T Jones]

Personally I can't see the clause standing up in court, but I'd be interested to hear any precedent.

However, given the piffling sum, I'd actually consider a completely different angle here:

What is the potential value of this agent to you?

What conversations & discussions have taken place?

Who are you in contact with?

In cliche terms, this could be an opportunity to learn & grow (Let's be honest, you bumbled into this blindly), to clarify that clause, to accept that you are naive and to set the scenario that they must tell you, before engaging in work, whether the customer is still on their books.

 

[DebtRecoveryUK]

Hi all, first post

I'm self-employed and I have a customer who won't pay some invoices.

There has never been a problem with the service provided or incorrect costs on the invoice. This customer provided all the purchase orders, I supplied the service direct to them and never dealt with any third parties.

They have terms in their purchase order saying they have ordered for someone else and they won't be liable (apologies I don't have the exact wording to hand). The customer is an estate/lettings agent and I have said the outstanding invoices are all with end-users they no longer trade with and the debt is nothing to do with them.

Is this a tactic that bigger companies use to fob off smaller businesses? It's about £400 so I'm trying to work out if its worth pursuing legally?

Thanks Paul

This does sound like a common tactic used to deflect responsibility, especially when dealing with larger or more commercially savvy companies. If the service was provided directly to the estate/lettings agent and the invoices were issued to them, then the responsibility to pay typically lies with them, regardless of who they say they were acting on behalf of.

We’d be happy to have a no-obligation chat to go over the details with you and advise on the best course of action. Even with smaller amounts like £400, the principle matters, and there are often straightforward ways to apply pressure that don’t require costly legal proceedings.

Let me know if you’d like to arrange a quick call or send the documents over for review.

 

[Lucan Unlordly]

What is the potential value of this agent to you?

Agree that this should be part of your thoughts process.

I got knocked by a local business for a nominal sum, about £50. I didn't need their couple of hundred quid a year but didn't want to leave the door open for a competitor so bit the principles bullet continued to serve them, adding an additional £20 to each invoice since 2014